Friday, February 18, 2005

Do I need an EDI VAN?

Yes, an EDI VAN is needed for EDI with most business partners to send and receive EDI.

A VAN is a Value Added Network. A VAN is responsible for the secure and reliable communication of EDI documents.

Your business partner probably already has one. However, you do not need to use the same VAN that your business partners uses because most VANs interconnect with other VANs.

The interconnects allows VANs to easily exchange EDI transactions on behalf of their clients with other VANs. This enables customers to choose the VAN that best fits their needs. It also ensures that VANs compete to keep down the cost of EDI.

Some business partners do not use an EDI VAN and instead use the internet for the transmission of EDI documents via AS/2. Wal-Mart is an example of a major retailer that uses AS/2 instead of a VAN for EDI transportation.

AS/2 is a set of standards for the transportation of EDI documents between two parties. AS/2 requires special software to encrypt and decrypt EDI. If your business partner requires AS/2, then you will either need to buy special software or arrange to outsource it to a third party provider.

4 Comments:

I don't think that that is entirely true. VAN's are not a nessessity for EDI communication. However, the communication mechanim is usually dictated by the companies that you are supplying. If you are not an OEM then you probably do need to have VAN communication but if you are an OEM then you can dictate the communication mechanism that is used by your suppliers. In my experience VAN communication is expensive and any outage is not within your control. It maybe easier and cheaper to use ISDN, https, VPN, TCP/IP or secure FTP to communicate with the suppliers but this does depend on the number of supplier you have, the volume of data sent, security required and the existing infrastructure that is in place. The industry as I see it is progressing more and more towards point to point communication over TCP/IP. The problem in the past was that the protocols used (i.e OFTP in Europe Automotive)lacked encryption and security which meant that it had to be run over a VPN, ISDN, Modem etc and it was easier to use a VAN as the central communication point. I think in the coming years this will be ammended and TCP/IP communication will become dominant.

Welcome to the EDI Blog.
The purpose of this blog is provide information about EDI that is of interest to small and mid-size businesses. Topics discussed include EDI capability that is needed in order to sell to large customers, web based EDI, EDI systems, EDI integration, EDI solutions and EDI VANs.
Questions and comments are welcome.

About Me

Steve is the president of CovalentWorks, a position he assumed in December of 2000. CovalentWorks provides web based EDI services to small and mid-size businesses. He has held a variety of technology leadership positions including VP of business development for BSI Consulting, Director at BSG, and management positions with EDS and Accenture.